Utilizing Primary Residence Equity for Financing

[Kevin DeBoer]

I've been trying to understand what opportunities there would be to find a lender that would be willing to take a second position on my primary residence in order to finance an investment opportunity. I've been working my way through different institutions and this seems to be a strategy that isn't generally accepted if the loan is in excess of my DTI.

If my home is valued at $2m and my primary mortgage is at $500k then I would think a lender would be interested in anything up to 70-80% LTV. I'm hoping to pull out $800k-$1m to immediately reinvest and allow for this to even function as a cross-collateralization situation, but even though the risk seems much lower than in other types of lending, I'm not seeing a clear path forward.

Am I missing some type of risk associated with this type of investment? Should I be looking at this differently?

Thank you

[Kevin DeBoer]

Thanks all. I had no idea there was a federal regulation against it. It's a little frustrating that the government is taking the position of protecting us from making decisions with our own property, but I guess that's the role they take on sometimes. 

So it sounds like the options are: 

1. Individual lender 
2. Liquidize the primary residence to extract the equity
3. Move into a rental so that I can list my primary residence as a STR and pull equity out of it as it sounds like I'd be able to if it were an investment property.